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The Evils of Unregulated Capitalism
Just a few years ago, a powerful ideology - the belief in free and unfettered markets - brought the world to the brink of ruin. Even in its hey-day, from the early 1980s until 2007, US-style deregulated capitalism brought greater material well-being only to the very richest in the richest country of the world.
Indeed, over the course of this ideology's 30-year ascendance, most Americans saw their incomes decline or stagnate year after year.
Moreover, output growth in the United States was not economically sustainable. With so much of US national income going to so few, growth could continue only through consumption financed by a mounting pile of debt.
I was among those who hoped that, somehow, the financial crisis would teach Americans (and others) a lesson about the need for greater equality, stronger regulation, and a better balance between the market and government.
Alas, that has not been the case.
On the contrary, a resurgence of right-wing economics, driven, as always, by ideology and special interests, once again threatens the global economy - or at least the economies of Europe and America, where these ideas continue to flourish.
In the US, this right-wing resurgence, whose adherents evidently seek to repeal the basic laws of mathematics and economics, is threatening to force a default on the national debt. If Congress mandates expenditures that exceed revenues, there will be a deficit, and that deficit has to be financed.
Rather than carefully balancing the benefits of each government expenditure program with the costs of raising taxes to finance those benefits, the right seeks to use a sledgehammer - not allowing the national debt to increase forces expenditures to be limited to taxes.
This leaves open the question of which expenditures get priority - and if expenditures to pay interest on the national debt do not, a default is inevitable. Moreover, to cut back expenditures now, in the midst of an ongoing crisis brought on by free-market ideology, would inevitably simply prolong the downturn.
A decade ago, in the midst of an economic boom, the US faced a surplus so large that it threatened to eliminate the national debt.
So what happened?
Unaffordable tax cuts and wars, a major recession, and soaring health-care costs - fueled in part by the commitment of George W Bush's administration to giving drug companies free rein in setting prices, even with government money at stake - quickly transformed a huge surplus into record peacetime deficits.
The remedies to the US deficit follow immediately from this diagnosis: put America back to work by stimulating the economy; end the mindless wars; rein in military and drug costs; and raise taxes, at least on the very rich.
But the right will have none of this, and instead is pushing for even more tax cuts for corporations and the wealthy, together with expenditure cuts in investments and social protection that put the future of the US economy in peril and that shred what remains of the social contract.
Meanwhile, the US financial sector has been lobbying hard to free itself of regulations, so that it can return to its previous, disastrously carefree, ways.
But matters are little better in Europe. As Greece and others face crises, the medicine du jour is simply timeworn austerity packages and privatization, which will merely leave the countries that embrace them poorer and more vulnerable. This medicine failed in East Asia, Latin America, and elsewhere, and it will fail in Europe this time around, too. Indeed, it has already failed in Ireland, Latvia, and Greece.
There is an alternative: an economic-growth strategy supported by the European Union and the International Monetary Fund. Growth would restore confidence that Greece could repay its debts, causing interest rates to fall and leaving more fiscal room for further growth-enhancing investments.
Growth itself increases tax revenues and reduces the need for social expenditures, such as unemployment benefits. And the confidence that this engenders leads to still further growth.
Regrettably, the financial markets and right-wing economists have gotten the problem exactly backwards: they believe that austerity produces confidence, and that confidence will produce growth. But austerity undermines growth, worsening the government's fiscal position, or at least yielding less improvement than austerity's advocates promise. On both counts, confidence is undermined, and a downward spiral is set in motion.
Do we really need another costly experiment with ideas that have failed repeatedly? We shouldn't, but increasingly it appears that we will have to endure another one nonetheless.
A failure of either Europe or the US to return to robust growth would be bad for the global economy. A failure in both would be disastrous - even if the major emerging-market countries have attained self-sustaining growth.
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45 Comments so far
Show AllWould that President Obama were as darn good as his Vice President at picking economic advisors. Mr. Stiglitz would then be able to support them both in the quest for fairness, revenue and recovery.
>>A failure of either Europe or the US to return to robust growth would be bad for the global economy. A failure in both would be disastrous - even if the major emerging-market countries have attained self-sustaining growth.
I have to disagree. Growth is not the be all to end all. Sustainability and growth are mutually exclusive. Growth always occurs at the COST of something else which is usually the environment.
It is this desire to continually grow markets and consumption that fuels the ecological catastrophe.
Stiglitz at heart is still a Capitalist. A system that allows private ownership of resources and lands so as to exploit for more growth, profit and revenues simply creates another disaster.
China has growth of some 9 percent a year. Can it really be claimed said model superior?
I would say rather that sustainability involves finding balance between growth and the damage it can cause.
Take a depressed city as an example. A bit of growth is needed to make it a sustainable community. If that growth is handled carefully, ecosystem damage can be minimized. Economic "growth" can stem from low-impact activity or even positive impact like clean up or remediation -imagine "green jobs" managing the return of industrial farmland to forest, for example.
I'm not sure Stiglitz would agree with me, though. ;)
If there were truth in names, we’d have a Primary Corporatist Party and a Secondary Corporatist Party.
Unregulated Capitalism is neo-feudalism. The mechanism behind it hasn't been named as far as I have seen.
Google “Corporatist Republicanism”.
Corporatist Republicanism is openly hostile towards individual liberty and democracy. Many, if not most, Democrats also operate within Corporatist Republicanism.
Excellent stuff. Thanks.
You now have one more "Follower" for your blog. :)
Good titles. Anyone who has ever stepped foot into the lobby of a giant corporation, with its abstract art on the walls and numerous employees sporting the corporate image, should be able to see how much corporations believe in democracy.
Good point.
We rarely discuss the "vibe" that big corporations put out here, don't we?
But it's true, the places look like modern -and therefore dull- palaces for some duke, with all his toadies running around.
Precisely, because that is how the Corp. dons see themselves.
I agree. Corporate high rises are temples to the top men and women, not to the thousands who work in them. And the modern corporate skyscraper tends to be very cold.
Stiglitz like most economists are full of shyt. We cannot return to robust growth without ruining the ecology of the planet. Who are these blind fuckheads?
Oh...that.
Sure we can -for a time.
We have a helluva lot of infrastructure, clean up, and eco-remediation work to do if we are to make up at all for the destruction that industry has already wrought. All of that can stimulate economic "growth".
Once we have a "green" society built up, we then need to move into a "steady-state" economic system and limit "growth" to low-impact, non-essential activities like entertainments, etc.
-matti.
Good luck convincing the so called "leaders" of such a plan. They're motto these days is DRILL BABY DRILL . Nothing but absolute collapse will stop these monsters.
What about jobs created in the renewable energy industries, organic farming, research in developing energy efficiency and scores of jobs that have nothing to do with manufacturing (such as pure research, education, pre-school education, health care and social work, etc.)?
I think he meant that the EU should support that strategy -like when it is actually running.
Awkward phrasing.
Critical point, maciek. Stiglitz's article is surprisingly hazy and lazy. After the moneychangers and economic hit men have sunk their credit hooks with subprime boondoggles, the IMF always mops up with austerity for the plantation workers. It’s the classic formula of “Shock Doctrine” disaster capitalism, and it’s exactly what Obama is now imposing on US middle class frogs.
Argentina fought off the IMF rapists and recovered from the assault. I hope Americans show the same wisdom and fortitude.
I believe Stiglitz is talking about job-creation stimulus (he usually is), like public works and public orders of domestically produced goods and services. Because many USAns are deep in revolving debt, job-creation stimulus would certainly help the banks, but the Keynesian "Dollar in a Hundred Pockets" method would profit WAY more than 1%.
Next issue to burn into the mind; interest-on-debt is TRIBUTE that the subjugated nation pays to the conquering EMPIRE. Public banking and credit as a public utility ( as the trio Kucinich/Zarlenga/ Richard C. Cook advocate) would kill this imperial/feudal scam dead-in-its'-tracks. Protection for the advocates (from assassination) would be needed, to enact this policy.
I don't think it's that simple - growth versus no-growth.
Steady-state economics is also perhaps something of an oxymoron.
What we can't do, and get away with, is destroy the underpinning of all economies - the natural world.
Focused growth in some areas, and reductions in other areas - that is realistic.
To Wit: The recent flagship report of the United Nations Department of Social and Economic Affairs - NOT referred to by Joseph Stiglitz, I noticed.
"Call for new technologies to avoid ecological destruction"
http://www.un.org/en/development/desa/news/policy/wess-2011.html
“Business as usual is not an option,”...
The global environment’s capacity to cope with human activity has reached its limits. About half of the earth’s forests are gone, groundwater resources are being depleted and contaminated, enormous losses in biodiversity have already occurred, and climate change threatens the stability of all ecosystems...
Without drastic improvements in and diffusion of green technologies, we will not reverse the ongoing ecological destruction and secure a decent livelihood for all of humankind, now and in the future...
The report is required reading as we gear up for Rio+20, which is an opportunity to define pathways to a safer, cleaner and more prosperous world for all."
=============
This report is some 250 pages long - and it is what I have been waiting for - from the horse's mouth, so to speak.
If we continue to distract ourselves from the main findings of this report, we are as stupid as some claim.
I have often seen bloggers on this site refer to Common Dreams as the land of the progressive thinkers - yet this report was given as short a shrift as if it were just someone's opinion. I am astounded by the lack of perception.
Manysummits
===
Excellent insight and references, Michael.
Mr. Stiglitz starts out well enough but in the end proves to be still captured by old-school economics --- that "growth", if not greed, is always good, our principal goal --- if with smarter regulation. Beyond causing obesity of course, compulsive growth is the blind and mindless strategy of bacteria and cancer, which, if ‘successful’, kills the host and itself. Might not similar laws apply to ecosystems and econosystems? How bizarre it is that ALL economists, even "enlightened" ones like Stiglitz, Krugman, Reich, et al, wear the same blinders that render them incapable of asking such vital questions outside of clinically ‘safe’ mathematical models. Is growth always a healthy goal, while the extent of regulation the only legitimate question?
Serving obsolete goals, such economists also draw salaries for paying lip service to irrelevant partisan debate. As overpaid members of the deceased liberal class, they affect convenient ignorance of the glaring reality that both parties serve the same Mammon in barely distinguishable camouflage. And they continue to pretend that Barack Hussein Obama, in his finest emperor’s clothing, a gifted orator and ivy-league lawyer, is a somehow just a poor negotiator or premature capitulator --- that he is not fundamentally committed to even more violent, regressive policies than GWB --- and that this bribe-funded theater played out on C-Span and MSM is somehow meaningful, or that our elections, post- Citizens United, are still remotely relevant. In supporting this pointless charade, they are really part of the problem, distracting us with the tweaking of levers and knobs on a dead engine in a vehicle without brakes coasting toward a cliff.
Doug Terpstra
Sounds like you are callling for a little "natural selection" here. How is that different in the end from the Republican Position? Is the idea of a "social contract" valid in today's society? We have concluded the "Rich" will not invest their hard earned dollars in the "Common Good". They draw their wealth from the "common good" all the time masquerading as"Captains of Industry". Mr. Stiglitz is to be commended and if the ideas fall a little short of perfection. that's life. The Journey is going to be a long one.
Perhaps it really is "all over" except for the funeral. The "Mess that is America" developed over the span of George Bush's career. How do we go from a surplus to an economic meltdown requiring government infusion of 700 plus billion dollars just to save the financial system, in eight years? That is a mind boggling thought. The Wars must end, an endgame appears on the horizon, with political fortune attached, The financial deficit is being engaged, with no one willing to sacrifice or change, and the simple fact of honoring a debt is lost in political mumbo jumbo.This is the "Mess that is America". Our President seems to be little more than the little Dutch Boy who stuck his finger in the dike. Heaven help us all.
I believe, where there is will, there is a way.
Michael: Fine post! If I have time, I may read that study/report. As to your comment:
" I am astounded by the lack of perception."
It would be naive of you to presume that everyone posting here is interested in the truth, and that some are not here to purposely "reinvent" it to their masters' liking.
Doug T: Great post.
Hello Siouxrose!
I would highly recommend this weighty report.
In "The United Nations" (2010) by Norrie MacQueen, senior lecturer in International Relations at the University of Dundee, the author gives a succinct and tremendously informative summary of the United Nations Environment Programme. He points out that there is literally no mention of the environment in the original 1945 Charter of Human Rights, nor was it on their radar screen.
Rachel Carson wrote "Silent Spring" ca 1961, of course, and JFK was aware. The book and the President from Massachusetts may be thought of as the founding impetus for the US Environmental Protection Agency.
!968 - Sweden pushes
1972 - The Stockholm Conference - the first high level United Nations conference on the environment; following which some one hundred countries form their own environmental ministries, and the United Nations creates the United Nations Environment Programme.
1972 is significant for me personally. I had just spent three years at McGill University in Montreal in the science of geology, and in 1972 the Club of Rome published "The Limits to Growth", which struck me like a thunderbolt, and made me a lifelong environmentalist.
1972 was also the year in which Christopher Stone, Professor of Law, University of California, wrote the legal tract "Should Trees Have Standing", presaging by almost forty years the rights recently given by Bolivia to the environment, 'Pachamama'.
Twenty years later we had the first Earth Summit at Rio, in 1992.
And twenty years after Rio we are planning Rio + 20, where the 250 page report I linked to earlier will I am sure feature prominently.
I have already read sections of this report, and I can recognize the influence of many of the reports now in my own collection: the original "Limits to Growth", Paul & Anne Ehrlich's "Population Bomb", the more recent updates of the "Limits to Growth" and their confirmation in hindsight, the awesome paper by James Hansen - "Target Atmospheric CO2: Where Should Humanity Aim?" (2008), the 2009 paper by Johan Rockstom et al of the Stockholm Resilience Centre, "Tipping Towards the Unknown", also known as "Planetary Boundaries", the work of both Lester Brown and Al Gore; the Hartwell Paper of just over a year ago, in which the climate, the environment and the human condition are imaginatively linked, the work, of course, of the IPCC, and unfortunately and finally, the utter failure of the various climate conferences to produce concerted action at a scale commensurate with the threat.
Let me close this little missive with a quote from Indira Gandhi, one of only TWO heads of state at the original 1972 Stockholm Conference, who summarized in a few words the intent and mission of this newly minted United Nations Report from the Department of Economic and Social Affairs:
"Are not poverty and need the greatest polluters?"
Manysummits in Calgary
======
Stiglitz talks out of both sides of his mouth... as author of 'Globalization and its Disconents' he basically can't understand why workers (the ones that can think for themselves that is) riot against globalization. It is precisely the EU and the IMF that demands austerity and are currently stripping Greece of its revenue generating assets and inflicting suffering on the people of Greece. As these assets are stripped of the nation, it will cripple its ability to pay the debts of these horrific loans by the IMF and the cycle repeats over and over.
As another point regarding the credibility, or more accurately, lack of credibility of Stiglitz is he from Columbia University the birthplace of milton friedman's disgusting and fraudulent concept of globalization. Milton Friedman was also an economic advisor to Nixon promoting the default of the US from the gold standard and American workers and standard of living has declined ever since. All to fund more of vietnam whereby wars enrich financiers and impoverish nations.
Stiglitz is Keynsian, not Friedmanite.
And Friedman was at the University of Chicago.
I have some trouble equating Friedman with Stiglitz. Somehow I can't see Stiglitzy cozying up to Lady Thatcher and Pinochet. In fact, his economics appear to be just the opposite......
They are. ;)
Capitalism = wealth concentration = power concentration = dictatorship
Communism = power concentration = wealth concentration = dictatorship
When the people lead, government works. When politicians lead, government fails.
Direct democracy
When it comes to ingenuity we should never underestimate Wall Street. If there is a way to make money out of thin air they will find it. Since the name of the game is to get rich fast before the bubble bursts we can expect Wall Street's operators to follow any likely opening. But the severity of the blast in 2008 didn't awaken us. And greed still trumps economic health. I greatly fear the next burst of a huge economic bubble deriving from a lack of regulation and oversight. Will the entire economy have to come down on our heads before we finally wake up? This is the legacy of Ronald Reagan and of supply side economics. Which, after all, was merely a philosophical polish of an ancient impulse: greed.
"Will the entire economy have to come down on our heads before we finally wake up?"
It is really starting to look that way, isn't it?
A key concept in the right wing world is to call those with money, "JOB CREATORS." Example of usage; Mitch McConnell scowls, "How can you increase taxes on the Wealth Creators just when we need them to invest in the economy and create jobs." Let's see how this works--at least in Mitch's mind. Premise 1: everyone wants to get as rich as they can as fast as they can so they will take whatever profit they are making and reinvest it in these profit making activities. Premise 2: As they reinvest they create jobs Premise 3: As more jobs are created more demand for goods and services will follow. There you have it, as easy as 1-2-3.Hence a virtuous circle. The only thing that could subvert this would be if the government took the money that the wealth creators would have used for reinvestment and diverted it for other purposes such as social needs of unproductive people--taxes.
It's so simple and self evident to them that there is almost nothing that will dissuade them from this belief. If it's not working out, it isn't because businesses don't see demand for their product. If its not working it can't be because investors are risk adverse and hoarding money. If it's not working it can't be that investors are riding speculative bubbles that have nothing intriniscally to do with serving societie's needs as an easier and faster way to make money. It must be because the capital they would have used from their surplus accumulation, i.e. profits has been taken from them. By the way this theory has nothing to do with going to a bank and getting a loan if investment capital is needed. If banks increase the money supply they are just "printing money" and that's just inflationary. Only the reinvested profits of businesses can create real growth, Let the small business out there accumulate their investment capital the same way. There is no real need to lend them money at cheap rates.
As untenable as this sounds to anyone who has taken Econ 101 it seems to make sense to the Republicans and to most of the working stiffs in America identify their interests with those of the wealthy. Perception becomes reality, no matter how big a lie that presumption is.
Joseph Stiglitz published by Al Jazeera, published by CD /// Amazing! /// Article published in any U.S. MSM? /// For my own part I find the article concise and to the point, and writers on this thread unusually erudite. /// Just one minor point to add: When FDR invoked Keynesian debt-financing to create jobs during The Great
Depression, the U.S. government had almost no debt and was still owed money from Europe and probably elsewhere. Today, we are allegedly near $14-trillion in debt. Keynes probably did not really anticipate this as even close to Realism. /// Meanwhile, under Clinton-Rubin a surplus was created, while under Bush/Obama-Rubin a huge deficit emerged. Due to Clinton-Rubin putting off the Judgment Day?
Keynesian-style Green Technology job creation remains possible. But the economics of job stimulus is different today. /// Funny how the rest of the world hopes we raise our debt ceiling!
-30-
The Complete Idiot's Guide to Urban Camping: How to find the best bridges, parks, homeless shelters and free edibles in YOUR area.
The latest book in the Complete Idiots Series educates readers on how to survive in the big city on zero dollars a day. It has strategies for dealing with overly territorial entrenched residents (Chapter Three: You're not sleeping under my overpass!) and which dumpsters are likely to contain the freshest and most nutritious foods (Chapter Seven: The Big Metal Doggy-Bag).
The book is full of common-sense tips for staying alive in the city sans income or possessions. For example, Chapter Five (The Doctor is Out - Doors) tells how used motor oil, which is available for little or no cost at many Auto Maintenance facilities, can be used to treat head lice. It also has pictorial explanations showing how to set broken bones using items commonly found in city dumps, the warning signs for numerous income related medical conditions (Chapter 5c: Scurvy, Starvation and STDs) and other medical advice/self-procedures.
An entire chapter (Jail, The Homeless Hilton) is devoted to the easiest ways to get incarcerated without angering the arresting officers. The book also contains local maps to places of interest to the homeless, along with foldouts of popular begging signs (Will Work for Food, Homeless Vet, Help My Hungry Kids, etc.). The guide comes in a clever waterproof case that can be turned into a beggar's bowl and is the perfect gift for that newly homeless friend or relative (or, plan for the future and buy one for yourself while you can still afford it).
The Complete Idiot's Guide to Urban Camping is the perfect book for America's new downwardly mobile middle class.
The biggest problem w Mr Stiglitz analysis here is his failure [except for Bush Jr because he focuses on 'Right Wing Ideologues IE: the GOP] to name just who gave unfettered so-called 'free'-market capitalism the intellectual & political heft to permeate the halls of economic & political academia & push it as Gov't policy to be rolled-out in the 'real' world [often via 'disaster capitalism']. He even begins his article almost like a 'Once Upon a Time' story that they used to tell little children. So lets start w Milton Friedman & the Chicago School of Econ [some might include Ayn Rand but she didn't have the same Univ of Chicago & Nobel Laureate creds as Friedman]. Its particularly note-worthy that Friedman got his Nobel Prize for Econ within a yr of becoming special Econ advisor to the notorious Pinochet regime [w its ties to the Nixon / Kissinger / Rockefeller / Ford / Bush Sr / CIA & ATT cabal] who let Friedman use Chile for a 'testing-ground' for his [Neo-Liberal] theories [Friedman allegedly said that disasters are 'opportunities' to roll-out policies based on his Econ theories. Sounds a lot like the NeoCon PNAC statement that to roll-out their policies for Full-Spectrum-Dominance they would need 'A Catalyzing & Catastrophic Event- Like a NEW PEARL HARBOR']. Then came the Reagan / Bush Sr regime & Reaganomics' [IE: voodoo economics] Trickle-down theory w deregulation [remember the S&L & Wall St Junk Bond scandals], union busting [the National Flight Controller's Union], tax cuts for Corps [along w ballooning Military-Intel costs which lead to ballooning deficits] & GATT. Then there was the FED's Friedmanite guru Alan Greenspan. Next came Slick Willie Clinton w NAFTA & the WTO, the Rubenites [IE: Larry Summers & Tim Geithner] who w Greenspan pushed for the repeal of Glass Steagall & further deregulation of Wall St's Banksters. This lead to the hi-tech bubble, then Bush Jr's Kenny-Boy's Enron Bubble, the Wall-St Bankster manipulated Oil, Grain, & Housing bubbles. All while Bush / Cheney doubled-down on tax-cuts for the wealthy because "Reagan proved that 'Deficits don't matter'". All this led to the 2007-2008 crash & the 'Great Recession. So w all of this back-ground info on how the country came to brink of economic calamity by Oct 2008, what does Pres 'Hope & Change' Obama do- he praises Reagan, puts Geithner & Summers [along w Greenspan's protegee' Ben Bernanke] back in charge of the Econ, & extends the Bush Tax cuts for the wealthy after promising not to!
Mr Stiglitz implies all of this in this article - but if you are not aware of the historical back-ground including filling in the names of the main players, this could become just an exercise in abstraction!
PROPOSED LEGISLATION THAT WOULD PRESERVE SOCIAL SECURITY INTO PERPETUITY
By John Bachar
The analysis of Social Security (SS), not to be found anywhere else, for the 16 year period, 1993 through 2008, has been done. The central result is that easy structural changes can be made to the SS taxation system by an act of Congress that will easily provide for sufficient annual contributions and Trust Fund assets growth to take care of the retirement needs of the increasingly aging population into perpetuity, as well as the replacement of the existing 73-year old regressive SS taxation system (only salaries/wages are taxed below a certain amount called the “cap”) by a progressive one (i.e., the taxation of all income, not merely salaries/wages, at a rate that increases with increasing income), and without reducing retirement benefits nor increasing the retirement age. Please click on:
1. Complete analytical version (November 2010) http://www.absentlinks.com/uploads/6/6/4/2/6642350/four_analytical_papers_on_preserving_and_strengthening_social_security_by_john_bachar.pdf
2. Comprehensive updated version without analytical tables (July 2010)
http://www.absentlinks.com/uploads/6/6/4/2/6642350/july_2011_comprehensive_version_social_security_exposing_the_destructive_fixes_and_showing_how_to_preserve_it_into_perpetuity.pdf
3. Comprehensive updated version with analytical tables (July 2010)
http://www.absentlinks.com/uploads/6/6/4/2/6642350/july_2011_with_tables_social_security_exposing_the_destructive_fixes_and_showing_how_to_preserve_it_intp_perpetuity.pdf
4. Brief version
http://www.absentlinks.com/uploads/6/6/4/2/6642350/social_security_taxation_system_revision_from_regressive_to_progress_on_all_income_november_2010.pdf
John M. Bachar, Jr.
Emeritus Professor of Mathematics
California State University Long Beach (CSULB)
Bio
I am a Mathematician with a 50+ year record of research and university teaching (to summarize; Ph.D. UCLA, 1969; M.S. Northwestern University, 1955; 36 years teaching at CSULB; dozens of research conferences; director of research conferences; research papers). In addition to the world of pure mathematics in academia, I have analyzed and written about dozens of issues that are in the Public Interest, with particular emphasis on the inherent mathematical content of such issues.
Hazy thinking. It is not the evil of unregulated capitalism. It is the evil of capitalism. This crisis of capitalism is not the first and it is caused by the same events that have caused the others: lack of consumption. The producers get paid less than the value of what they produce. There are periodic crises while the excess gets burned off. Keynes had the idea that government help through the down time could restore consumption by restoring wages (work projects.) This has reached its Waterloo as the public coffers have been used up to directly bail out failed private interests; and moreover, the public wealth has been stolen by privatization to enrich the capitalist class, so that now the public is broke and cannot sustain the failed capitalist class without further robbery of the producers (health, education and social security.) To combat this failing trend the capitalists have overused their previous panacea: war. The military has been the capitalist class' modern interpretation of Keynesianism. Government investment in private war enterprise has been floating the failed US economy for decades. Fear and war-mongering have kept the US people from seeing this.
The solution to the collapse of private property is social property. No more privatization. Not one more public cent for the capitalist class. Then let's see how efficient "private enterprise" is!
Suggested reading: The Communist Manifesto, Karl Marx and Frederick Engles, 1848, 42 pages long. It would be well for north americans to familiarize themselves with the writings of Marx, instead of believing what the capitalist class has been saying about Marx. Of course the capitalist class condemns him. North americans are the most fearful people when it comes to examining real alternatives to imperialism. Land of the free? Home of the brave? Having been propagandized since birth, without investigation the north american covers his ears and runs at the mere mention of alternatives to "private enterprise." Let's see some bravery. Or is bravery only to be shown as dropping bombs from a drone?
Bravery will show when we accept the need for and act upon the socialization of production, and use our productive strength for the needs of humans and the planet instead of for useless commodities, endless war and the destruction of the earth for "private profit". We can start with the socialization of the banks and money, the cancellation of public debt (the capitalists have been paid enough,) followed by the declaration of peace. This would free up trillions of dollars for the creative construction of a new symbiotic relationship to nature and a golden age for humanity. Cast off the yoke of private enterprise. As Proudhon said, "property is theft", and private property/profit is the root of our present evil.
Stiglitz doesn't have a clue. Bush was the biggest spender since Johnson (http://www.cato.org/pub_display.php?pub_id=3750) & the biggest regulator since Nixon (http://reason.com/archives/2008/12/10/bushs-regulatory-kiss-off). "Unregulated capitalism" what a crock. Stiglitz needs to face the fact that interventionism has failed, there was no "Unregulated capitalism" to fail.
Guess what? Having 'regulated capitalism' is like being 'a little bit pregnant.'
'Turbo-capitalism,' 'capitalism-on-steroids,' 'neo-liberalism,' 'Reaganomics,' whatever-the-hell-you-wanna-call-it, is simply capitalism carried to its logical conclusion.
Either you support it or you don't.
It's all well and good to comment about an issue that needs the attention of citizens. It's even more important to ACTUALLY DO something significant that will allow necessary changes to be made to improve our country.
*Real Change* will not happen without effective grassroots effort.
Here is a link that will interest many of you.
http://signon.org/sign/public-funding-of-elected
Capitalism needs to be regulated for sure, but the most predatory, destructive form of capitalism, (stock) market-based capitalism, that requires always growth (increasing profit) is the most destructive, because blind investors look only for quick profit regardless of how or consequences and have court-enforced rights to demand it. Result:it eats everything it touches and quality, workers and their pay and benefits are elimimated, jobs outsourced, pieces of the company are spun off, competition bought off, productive assets sold and money borrowed agaist the company as collateral and eventually bankruptcy as a ploy to deny debt and worker contracts. You can have stable capitalism, as in family or ownership of a private company not traded on the market or non-profits and public companies that operate on a cost basis which also provide jobs, products and services that serve the community rather than predate it.. Wall Street regulation, as in Dodd-Frank, must be implemented as the first order of regulation, including usury law.